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Monday, July 27, 2015

Since
writing my
previous post about what Homo Economicus would do about North
Korea, some people have written me asking questions about what Homo
Economicus would do to solve other problems that are plaguing the
world.

I
think it's very important to get this out of the way. In most cases,
Homo Economicus would do absolutely bupkis. In fact, he wouldn't even
care about many of the world's big problems unless they directly
affected him somehow.

So,
for example, what would Homo Economicus do to help to reverse climate
change? The extent of his involvement in helping to do that would
probably be limited to counting his money after making a very
lucrative investment in Silver
Spring Networks. That's assuming that he thinks the benefits of
investing in Silver Springs Network is greater than the benefits of
purchasing
flood insurance for the Maldives.

The
next set of questions that I received was then what Homo Economicus
would do about “X” if he were a political leader in a democratic
republic whose job security depended on achieving results.

Unfortunately,
it's still very likely that he would do nothing. That is because,
according to James
M. Buchanan's public
choice theory, politicians and bureaucrats are also influenced by
self-interest and utility maximization.

This
led one reader to question my decision to compare
Homo Economicus to the Vulcan race. After all, Vulcans may be an
unemotional and calculating lot but the fact remains that they tend
to have goals, such as the pursuit of knowledge and other
Utilitarian goals, that go beyond their own narrow
self-interests. Another reader therefore posited that it would be
more appropriate to compare Homo Economicus to the
Ferengi rather than to Vulcans.

I
thought that this was a fair criticism. Upon looking a bit deeper
into Star Trek lore, I think that it is fair to say that Homo
Economicus is, indeed, closer to the Ferengi than the Vulcans.
However, based on my rather limited knowledge about DS9, it appears
that the Ferengi can become quite emotional – often giving in to
anger, envy, and excessive greed. Feel free to correct me if I got my
Star Trek lore wrong again.

Homo
Economicus is not only completely emotionless, he also never gives in
to excessive greed. That is because Homo Economicus, being the
completely rational individual that he is, would never violate the
Law of Diminishing Marginal Utility like the Ferengi or other
intelligent beings, fictional or otherwise, would.

So,
I think it would be fair to say that we would need to combine the
most extreme characteristics of Vulcans and the Ferengi in order to
come up with something that might resemble Homo Economicus.

In a Nutshell

Also,
as I said before, Homo Economicus is not immoral. It's true that,
like the Ferengi, he would sell his own mother for a nifty profit if
the cost of selling his mother were not greater than the benefits he
would gain (we have to keep in mind that getting arrested would be a
rather large cost that Homo Economicus would have to consider if he
ever decides to engage in human trafficking).

Economic
rationalism says nothing about ethics. Hover, that is not to say that
Homo Economicus will deliberately always seek to be unethical. Being arrested by
the police or being ostracized by other members of his community,
which would seriously hamper his business relations, are just some of
the costs that Homo Economicus has to contend with. However, if the
benefits outweigh the costs, he will not let something as trivial as
ethics stop him from conducting unsavory business deals.

So
there we go. In short, Homo Economicus is a supremely rational,
amoral, profit-maximizing, and dispassionate sociopath whom many
people in the world might become fascinated with, adore even, but would never
want to meet in real life.

If that were the case, then why would anyone bother with what Homo Economicus would do? After all, he only cares about himself and doesn't care about the interests of the public.

It is all about incentives. If Homo Economicus were a politician, he would be the last person in the world anyone ought to expect help from. If he were a private individual or just a businessman, no one ought to expect anything from him besides looking out for his own interests, as well as those of his shareholders.

However, if he were a private contractor who was paid handsomely to come up with ideas for public policies that could effectively solve some of the world's problems, then I think we could entertain interesting, albeit often unpopular, means to resolve them.

Thursday, July 23, 2015

Before
I start, I think it is important to mention that the following blog
post about the “appropriate” way to deal with North Korea is not
an opinion that I personally share. Personally, every fiber in my
being says that the only proper way of dealing with North Korea is to
threaten it with disproportional, excessive, and over-the-top
military action if the North Koreans ever threaten the safety and
sovereignty of the Republic of Korea as they have in the past.

However,
those are my personal prejudices at play – something that Homo
Economicus would not suffer from.

What Motivates Homo Economicus?

Then
where do we start? Firstly, I think it is important to define what
Homo Economicus is motivated by. He is motivated by one thing only –
maximizing his utility at minimal cost. This is the definition of
being economically rational. It does not say anything about how a
person can be rational ethically, socially, or humanely.

Also,
for this to work, I am assuming that Homo Economicus is Korean and
currently lives in Korea. Interests and motivations can change
depending on proximity.

So,
for example, although many people think that the ideal solution for
the ongoing Korean crisis between North and South Korea would be for
the two countries to reunify into a single democratic republic at some point in the future, Homo
Economicus would not care for that at all. Unless Homo Economicus is
one of the donsCEOs of the chaebol class who would be
able to purchase cheap North Korean property and assets from the new
post-reunification Korean government, like
they were able to purchase cheap South Korean property and assets under the Syngman Rhee administration, Homo
Economicus would most likely suffer from financial hardships like the
rest of the country should a sudden reunification take place.

Nor
would Homo Economicus be moved by promises of future wealth, much
less patriotism. Although many advocates of reunification admit that
reunification will have its costs (their cost estimates tend to be
comically
low), they tend to sweeten the prospect of reunification by
claiming that the Korean economy would enjoy an economic
bonanza in the future.

Even
if it were true that the Korean economy would benefit greatly in the
future, Homo Economicus would still have to pay (a lot) for
reunification one way or another. Besides, as the
Time Value of Money has proven, ceteris paribus, having
money now is always better than having money later.

A Nuclear-Free Korean Peninsula?So
what would “maximum utility at minimal cost” look like in regards
to peace on the Korean peninsula?

The
end result has to be a cessation of all hostilities. However, Homo Economicus' version of “peace” is likely to
be different from how everyone else perceives “peace.”

For
one thing, would Homo Economicus think that denuclearization is a
prerequisite condition for peace? That would seem unlikely. Assuming
that Homo Economicus is Korean and lives in Korea, North Korea's nuclear weapons would pose no greater
threat to him than its already existing arsenal of conventional weapons
and WMDs. The only difference that North Korea's nuclear weapons make
is that they will merely poison the rubble and corpses with
radiation. Dead is dead. (A Japanese or an American Homo Economicus
might reach a different conclusion, of course.)

So,
would Homo Economicus prefer that the South Korean government adopt a
more amiable position in regards to its negotiations with North
Korea?

The North Wind and The Sun

We
will have to look at the evidence. While the
Sunshine Policy was in effect, the only time the North Koreans
engaged in hostile acts was the Yeonpyeong
Naval Battle that occurred in 2002. Six South Korean sailors died
as a result, and the patrol boat, the PKM 357, sunk as a result of
the battle. A
movie about this naval battle was made just recently.

So
although it is likely Homo Economicus would prefer the South Korean
government to adopt a friendlier tone to bring the North Koreans to
the negotiation table, considering the pattern of erratic behavior that the North Korean leadership has consistently shown in the past (how's that for an oxymoron?), it is unlikely that Homo Economicus would
think of the present North Korean government as a reliable
negotiating partner.

Then
other questions have to be asked – chiefly, if not this North
Korean government, then who would Homo Economicus want the South
Korean government to negotiate with?

So,
in order to maximize utility, Homo Economicus would likely favor the South
Korean and American governments to engage in clandestine activities
to promote, empower, and enrich these elites. Flooding the China-North Korea border with cash intended to be funneled into individuals' pockets should be easy enough to do. But if there is a worry that the cash could wind up in the hands of the North Korean leadership, perhaps Bitcoins or other crypto-currencies might be alternative options to consider.

After all, one
of the first lessons that people learn in Economics 101 is that
people will always respond accordingly to incentives. Everything else
is merely commentary.

If
the North Korean government is having difficulty keeping its elites
in check, the South Korean and the American governments might be able
to nudge North Korea toward regime change, though not regime
collapse, by providing at least a large enough portion of these
elites, preferably the more dovish civilian elites as opposed to
those who are in the more hawkish Korean
People's Army, with sources of income and wealth that are
independent from Kim Jong-un's coffers.

It
could be argued that a North Korean government that is not run by a
progeny of Kim
Il-Sung will lack legitimacy in the eyes of the North Korean
people, particularly the denizens of Pyongyang. However, it is very doubtful that Homo Economicus would be
overly concerned with the preferences of the North Korean people.

Assuming
that the next crop of leaders who would replace Kim Jong-un are more “moderate” and are willing to cease
hostilities in exchange for the lifting of sanctions and the opening
of trade relations, Homo Economicus would be more than happy for the
South Korean government to re-adopt the Sunshine Policy and never even
breathe a word about requiring the North Korean government to
dismantle its nuclear program.This also in no way assumes that the next crop of leaders would remedy the country's dismal human rights record or pursue political reforms beyond what they think are necessary to cement their hold on power. As long as Homo Economicus' goal is merely peace between the Koreas, the topic of human rights might not even register in his mind to begin with.

Arguing With Myself

That
is, of course, my take on what Homo Economicus might think about the
matter. Although I have tried to remove as much of my own personal biases
as possible, I recognize that I might not have been very successful.Which is why I think it is important to note that I could be completely wrong about the whole thing.One possible reason that I think I could be dead wrong about Homo Economicus supporting regime change in North Korea is the lack of transparent information about the political players in North Korea. There are far too many factors that remain unknown about what is going on in that country.For example, the elites could be just as bad or worse than Kim Jong-un. Or a regime change might cause a bloody conflict between the doves and the hawks within North Korea, which could potentially spill across the border into South Korea AND China. That would certainly give pause to any of Homo Economicus' machinations.It's entirely possible that the lack of reliable information could compel Homo Economicus to assume the position that it is preferable to deal with the devil he knows to dealing with the angels(?) that he doesn't know.Therefore, I readily admit that Homo Economicus might simply advocate a return to the days of bribing the North Koreans for peace.What he chooses to ultimately do will depend on cost-benefit analysis. Only after quantifying various things such as the costs of bribing the North Koreans for peace (national humiliation does not count), the financial costs of dead soldiers and sunken ships and other military expenditures, the benefits of the dividends of peace, the opportunity costs of forgoing regime change, etc. would Homo Economicus make a final decision.

What Do You Think?So, here's my question to you. Do you think that any of these proposed actions would be beneficial? Are they even desirable? Would they be effective? Are they even realistic?If
you think that Homo Economicus might behave or think differently,
feel free to let me know why in the comments section below.

Wednesday, July 22, 2015

Over
the past two years, I have written at great length about economics
and I have been a tireless defender of the free market for both its
moral and practical virtues.

However,
what is undeniable is that my blog is not very unique. Perhaps it
might be considered unique when we look at the types of blogs that
exist within the narrow confines of the K-blogosphere. However, when
we look at the Internet in its totality, there are many bloggers –
many of whom are actual economists who teach economics for a living
(which, sadly, I do not) – who do the same thing that I do, except
they do it much better.

Despite
the fact that most of the show was spent talking about decidedly
non-economic topics (and especially considering the fact that I sound
like an imbecile when I do not have ready access to spell-check), it
was a fun experience nonetheless.

Having
a decidedly one-track mind, however, while we were recording the
show, I could not help but think about how some of the real-life problems we
were discussing could be “solved” by economics.

So,
I began to flirt with the idea of creating a new series for this blog
– What Would Homo Economicus Do? (The name is still tentative.)

We
have to remember that, with the possible exception of genuine
sociopaths, no one in the world actually lives like a Homo
Economicus – the purely rational and self-interested person who
seeks solely to maximize his utility at all times. Think of your
typical Vulcan
as the perfect example of Homo Economicus. No, not even Spock possesses the necessary qualities to be considered as an example of Homo Economicus as he is
still partly human. Only a full-on Vulcan would qualify.

In
other words, Homo Economicus is not a pleasant person to be around.
He is devoid of human follies or emotion or compassion or fancies and
a proud free
rider. He is the type of person who would need to do an objective
cost-benefit analysis before deciding to rescue his own mother from a
burning building.

However,
Homo Economicus is not immoral. Far from it. He is simply amoral.
Therefore, by using Homo Economicus as a vehicle, I think it would be
possible to talk about things that normal people, with our sense of
right and wrong, would not normally talk about when it comes to
dealing with some of the world's most pressing problems – but more
importantly, perhaps spark a debate about different and novel ideas
that people would not normally talk about.With
that in mind, in the coming days, I will write and upload my first
post for this new series – “What Would Homo Economicus Do About
North Korea?”

Friday, July 3, 2015

Last night, I read an article written on NK News. Typically, NK News is a publication that I have found to be informative and respectable. However, as I read this column about the Korean Army's jeongshin kyoyuk, the Korean military's psychological education that it administers to all members of the Armed Forces on a weekly basis, for the first time, I could not help but roll my eyes.The following are my rebuttals to the points that were made in the column.1. This writer over-estimates the effectiveness of jeongshin kyoyuk (the South Korean military's "psychological education.") In my time in the ROK Army, I learned that they are mostly PowerPoint slides that do nothing more than bore the listeners to tears.

2. That being said, it is not a waste of time. Considering the fact that about half of South Koreans in their 20s seem to think that the Korean War began when the South invaded the North, the Korean military, despite its hamfistedness, is clumsily trying to correct this horrible wrong. Jeongshin kyoyuk can be streamlined and modernized, but it is not a waste of time.3. "Since weekly sessions still regularly reference President Syngman Rhee and Park Chung-hee, whose administrations ended more than 50 and 30 years ago, respectively, education is outdated."As someone who has served in the South Korean Army, I can say with absolute certainty that this was a load of bullshit. I only heard President Syngman Rhee mentioned once when the lecture was about the initial partition of the Korean peninsula and President Park Chung-hee was never even mentioned.4. The military was not, is not, and will never be a warm and fuzzy organization that just wants the whole wide world to sing Kumbaya. The military's duty is to defend the country from its enemies when all other means fail. And that means it has to train to look at the North Koreans as the enemy and kill them if it is necessary.

5. The North Koreans ARE the enemy. There are a lot of names of young boys etched on the War Memorial, some more recent than others, who were killed by North Koreans.6. The North Korean system IS inferior. South Korea might not be perfect but unlike what happened in North Korea, millions of South Koreans did not die of starvation.7. There are many reasons that North Korean defectors face many challenges in adapting to life in South Korea. Jeongshin kyoyuk is not one of them. The military states emphatically that North Korea is the enemy, but it has nothing but sympathy for North Korean defectors who are able to make it across.8. Reunification policies come and go as politicians come and go. The Sunshine Policy was a disaster and this so-called Reunification Bonanza was nothing more than political posturing that was full of unsubstantiated irrational exuberance. It will have an even shorter footnote than the Sunshine Policy.In the meantime, the North Koreans have thousands of artillery pieces aimed at Seoul (see here and here), various WMDs, and a huge special forces unit that has been trained to kill as many South Koreans as indiscriminately as possible.So excuse me if I roll my eyes at this nonsensical sentimentalism in NK News and continue to view the North Koreans as a mortal threat to my country.

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About Me

My name is John Lee and I am currently the editor and writer behind the independently-run blog, “The Korean Foreigner.”

Recently, I have also begun to work as a freelance copy editor for Freedom Factory. Here, with permission from Freedom Factory, I shall post English translations of Freedom Factory’s weekly newsletter “Freedom Voice.”